Damage has been done
BY NOW everybody knows that Steinhoff is in trouble. If you hadn’t heard of Steinhoff, you would have heard of some of the many brands the company owns, including Ackermans, PEP, Tekkie Town, Russells and HiFi Corporation.
The multinational company is a global player with 12 000 stores in more than 30 countries.
The warning signs that something was wrong with the company were there for a while, but it reached crisis point last week when Markus Jooste, the company chief executive, announced his resignation with immediate effect.
The company’s full-year results, which were expected last week, were delayed indefinitely.
The company has commissioned an independent investigation and the German authorities, where the company has a base, are also investigating.
In South Africa, the Financial Services Board and the JSE have also started their own investigations. We are told there were accounting irregularities, but exactly what those were remain unknown.
In fact, there are more questions than answers about what went wrong. What we do know is that the furniture retailer has lost about 90% of its stock value on the JSE, although it did recover somewhat this week.
Anyone who invested in the company directly or indirectly is now poorer. We need greater clarity on what went wrong and we deserve answers.
We therefore welcome Parliament’s decision to call the executives of Steinhoff to explain.
Parliament’s standing committee on public accounts (Scopa) said it would call the company’s executives early in the new year, and we trust that Christo Wiese and his management team will make themselves available.
Themba Godi, the chairperson of Scopa, rightly pointed out: “South Africa’s reputation is in the gutter because of political and corporate corruption. All progressive and patriotic South Africans must put a stop to these acts.”
What is clear is that shareholders were let down. Not just by those who ran the company for the past few years, but also by the international ratings agencies.
Late last week, Moody’s downgraded Steinhoff by four notches to junk status. It also put the company on a review for further downgrades.
But it was a case of too little too late because the damage had already been done. If it were up to us, we would downgrade the rating agencies for having slept on the job.